E-commerce wasn't enough to save Zara's accounts, but it will be essential for its future. Inditex, the Spanish multinational owned by Amancio Ortega, the tenth richest man in the world, recorded the first red in its history in the first quarter of 2020 and, for this reason, decided to close 1.200 stores in Europe and Asia, equal to 16% of the total.
Due to the coronavirus pandemic and the consequent worldwide lockdown, Inditex recorded a net loss of 2020 million in the first three months of 409, while turnover has almost halved, going from 5,9 billion in the first quarter of 2019 to 3,3 billion in March 2020.
From these numbers Inditex, which in addition to Zara also owns Massimo Dutti, Bershka, Oysho, Stradivarius, has however extracted an important fact: while sales in stores have dropped by 44%, online ones soared by 50% in the first quarter and even by 95% in the month of April alone. Percentages that led the group to decide to close the smaller physical stores, easily replaceable with the online store, and invest above all in digital. The closures will affect 1.200 stores, mainly located in Asia and Europe.
The group which has already invested 2,5 billion euros to strengthen the online platform and according to its intentions will release a further 2,7 billion in investments, allocating 1 billion to e-commerce alone. Inditex provides that online sales will represent 25% of its turnover in 2022 against 14% in 2019.
